NHAI Arbitration| Landowner Can Seek Appointment Of An Expert Commissioner To Determine True Value Of Property: Kerala High Court

The High Court of Kerala has held that a landowner dissatisfied with property categorization by Competent Authority for Land Acquisition (CALA) can request an Expert Commissioner's appointment to ascertain the property's actual value.

The bench of Justice Viju Abraham held that an arbitrator cannot dismiss a landowner's application under Section 26 for an expert commissioner's appointment without considering their arguments, solely relying on the CALA report.

Facts

The petitioner's property was acquired for widening the National Highway. Petitioner claimed that its property is a commercial property and must be put under Category-I, however, CALA put it under Category-VI. Aggrieved thereby, the petitioner invoked arbitration under Section 3-G(5).

Before the arbitrator, the petitioner filed an application under Section 26 of the A&C Act seeking appointment of an Expert Commissioner to determine the true commercial value of the property.

The arbitrator rejected the application. Aggrieved thereby, the petitioner preferred a writ which was also dismissed, however, in appeal the Division Bench directed the arbitrator to consider the application on its own merit without being influenced by its earlier observation.

Pursuant to the directions by the High Court, the petitioner filed another application. The arbitrator dismissed it solely on the ground that the assessment was already done by CALA and there was no need for further assessment. It did not deal with the grounds on which the report by CALA was challenged and appointment of an expert was sought.

Aggrieved thereby, the petitioner filed a writ against this order.

Contention by the Parties

The petitioner challenged the order on the following grounds:

• The arbitrator did not engage with the submissions by the petitioner and dismissed the application solely on the ground that an assessment was already done by CALA.
• The report by CALA is not final and a landowner can seek appointment of an expert to determine the true value of the property.

The respondent made the following submissions:

• That the valuation was as per existing rules and no further report of the expert is warranted.

Analysis by the Court

The Court held that an arbitration under Section 3G (5) of NHAI Act is conducted under the provisions of the Arbitration and Conciliation Act, 1996. It held that the role of the Arbitrator under Section 3G(5) is similar to that of an Arbitrator under the A&C Act and it is considered a fact-finding authority. It held that Arbitrator could appoint an expert commission and consider evidence to determine the true market value of the property.

The Court found that the order was issued without considering petitioner's contentions and the directions issued by the Division Bench. It held that an arbitrator cannot dismiss a landowner's application under Section 26 for an expert commissioner's appointment without considering their arguments, solely relying on the CALA report.

The Court relied on the judgment of a coordinate bench in Unnikrishnan v. Arbitrator (District Collector) Collectorate, Thrissur (2023 (4) KHC 521) to hold that parties must be given the opportunity to present evidence before the Arbitrator. It noted that the Arbitrator should not be influenced by the report of the expert commission, as the commission's report is only a piece of evidence.

The Court held that a landowner dissatisfied with property categorization by Competent Authority for Land Acquisition (CALA) can request an Expert Commissioner's appointment to ascertain the property's actual value.

Accordingly, the Court set aside the previous order and directed the authority to reconsider the matter, taking into account the specific contentions raised by the petitioner and the court's directions.

Citation: 2024 LiveLaw Ker 273

Case Title: M/s Punarnava Ayurveda Hospital Pvt Ltd v. The Arbitrator for NH-66, WP(C) No. 6947 of 2024

Date: 25.04.2024

Counsel for the Petitioner: M.K.SUMOD VIDYA M.K. RAJ CAROLIN V. THUSHARA.K

Counsel for the Respondent: N/A

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